With its large gay community, celebrity residents and beachfront cafés, Brighton is regarded as one of the hippest, most laid-back towns in Britain. But a glimpse of its seamy underbelly emerged last week as campaigners offered a £50,000 reward to find the killers of a 19-year-old girl sucked into a world of drugs and depravity.

Katrina Taylor was found stabbed to death in a graveyard in July 1996. Despite a big police inquiry and two Crown Court trials, no one has been found guilty of her murder. Campaigners believe this is because of the local force's failure to investigate the crime properly. They want a full investigation by the Police Complaints Authority.

Last week they began distributing a list of Sussex officers who are accused of varying degrees of incompetence, from allegedly failing to investigate the background of key witnesses to failing to respond to information about the whereabouts of the accused.

The murder attracted great publicity when it was discovered that the victim had taken part in a police murder reconstruction in 1986, posing as nine-year-old Nicola Fellows who had been found strangled in a Brighton park along with a friend. Ten years later, Katrina was struggling to bring up her baby daughter and fund her £200-per-week heroin habit.

Late in the evening of 8 May 1996 she agreed to act as lookout while her boyfriend Mattie Laurie and friend John Cosham burgled a house belonging to Neisha Williams, the former girlfriend of a drug dealer. As well as stealing personal belongings, the thieves set fire to furniture and flooded two rooms. After using her contacts to find out who had been responsible, Williams formed a posse which rampaged through Brighton hellbent on revenge.

Among the members of the gang were her ex-boyfriend Trevor Smith, a white Londoner obsessed with black culture who had a string of previous convictions. He called his flatmate, Fergal Scollan, who had previous convictions for assault and actual bodily harm. With Smith he had begun a large-scale operation growing super-strong 'skunk' cannabis. Williams's brother, Simon, was also in the posse.

Laurie could not be found - he had already been arrested for the robbery - so the posse tracked down Cosham. He was beaten and stabbed in both legs with a screwdriver. A friend who was found with him was stabbed in the face, beaten with a hammer and repeatedly kicked in the head. The posse then moved on to track down Katrina Taylor. They forced their way into her family home and attacked her sister, but Katrina was nowhere to be found.

The following day Katrina was arrested for her part in the burglary. Detectives asked magistrates to remand her in custody, but she was granted bail to look after her eight-month-old daughter. Nearly two months later Simon Williams spotted her outside a hotel. He persuaded her to go with him to 77 Centurion Road, the council house to which Neisha Williams had moved. Williams called Smith and Scollan who rushed back to Brighton from London. The evening began with a shouting match; at one point a knife was held to Katrina's throat and she agreed to pay for the damage caused by the burglary at the rate of £10 per week from her unemployment benefits. At 11.15pm screaming was heard in a graveyard a short walk from Centurion Road. Katrina's body was found the next morning by a man walking his dog. According to the pathologist's report, she had been held from behind and stabbed from the front by either one or two people.

At the trial at Lewes Crown Court in June 1997 Neisha and Simon Williams claimed Katrina had left the flat that evening with Scollan and Smith, who later returned saying she was dead. Scollan and Smith claimed she had left with the Williamses and that the exact opposite was true. Both men said they believed Simon Williams had killed Katrina and they had gone into hiding. Simon Williams admitted trying to dispose of the murder weapon.

Neisha was found guilty of false imprisonment but she and her brother were cleared of murder. Smith and Scollan were found guilty. Smith and Scollan launched an immediate appeal claiming the judge had misdirected the jury over aspects of the evidence. The Court of Appeal ordered a retrial which began at the Old Bailey in October 1999.

For legal reasons, Neisha and Simon Williams did not give evidence. Lawyers for Smith and Scollan successfully argued that there was no case to answer, and the judge directed that both men be acquitted of murder because of insufficient evidence. Scollan had a charge of false imprisonment dropped. Smith admitted the same charge and was sentenced to 30 months but walked free because of time served.

Katrina's mother, Kathy, told The Observer : 'I am disgusted how this has turned out. It has destroyed my faith in the justice system and the police. My daughter was stabbed to death and no one has been made to pay. I won't rest until they are.'

Kathy will meet campaigners this week to discuss options for moving forward. A spokesperson for Sussex Police said: 'The police thoroughly investigated this murder. The file remains open, and if anyone has information we would urge them to come forward.'